Illegal gambling brings in millions, few arrests

High payouts, low risks for operators keep illegal game rooms up and running

Several months of investigation by Examiner staffers have revealed a saturation of illegal casino-style gambling outlets in Southeast Texas, with some game room owners grossing $3 million or more in unreported earnings a month. Dozens of game rooms have been identified all over the Golden Triangle, raking in thousands of dollars a day in proceeds for the business owners, and paying out cash under the table to patrons. Still, local law enforcement officers say they are limited in what they can do to stop it.

The problem

The eight liner casino-style machines in illegal gambling rooms are supposed to be used for amusement, not gambling. Legally, players can be offered prizes in value up to $5 - any value over that, or anything paid out in cash, is illegal. But enforcing the laws of the land isn’t easy, according to Sgt. Mike Custer of the Beaumont Police Department’s special assignments unit.

“The law is specific on these game rooms and what we can do,” said Custer. “There is a potential legal use for these machines, but in my experience I’ve never seen one being used legally.”

“Rose,” a regular gamer until she quit frequenting the local game rooms after her habit caused her to become delinquent in paying bills and overdrawing her bank account, offered confirmation, saying she regularly received cash at local gaming outlets.

“I didn’t win very often,” she said with a chuckle. “But when I did win, I wanted my cash.”

Custer said the fight against illegal gambling entities is “an ongoing battle.”

“We have these game rooms popping up and there’s no overhead,” he said. “They pop up, they get a building, they lease a building, overnight they move in 20 eight-liner machines and they’re running, so we try to take a two-prong approach on this. (The) special assignments unit tries to work with the tools that we have such as code enforcement, fire department permits, alarm permits and various administrative avenues like the State Comptroller’s Office. Anything we can do. We try to monitor that, and our coworkers in special services details, the vice and narcotics guys, they work the gambling side of it. They’re a little bit more equipped to work that through undercover roles. They go in with the search warrants and all that. Sometimes, the comptroller can go in there with their calculator and do a lot more damage than we can with a search warrant.

“The problem with working a game room is, like in a drug deal, the person who cooperates with us is generally in the game. The person involved in that game room is going to be a 65-year-old grandmother or somebody with no criminal history, somebody who has no criminal record. They go and play the games because they don’t want to drive to Louisiana. So in order for us to prosecute it criminally, that person has to get up there and testify as to how they assisted us and what they saw and who did this and that, so it is very difficult to do an undercover operation in a game room. That’s why we are continually trying new methods to regulate these places.”

The fix

Custer said it is difficult and expensive to bring in confidential informants.

“It’s hard to bring people in, and you pretty much have to let these people (at the game rooms) get to know you,” he said. “You have to go in repeatedly, gambling, spending money. It’s a very expensive investigation.”

Chief Dave Shows of the Vidor Police Department said his office knows there is illegal gambling going on in Vidor, but his department cannot afford the expense of an investigation. He said he’s limited by budgetary constraints, particularly since officers in Vidor’s police department are easily identified by the operators and owners of the game rooms. He said he would need to hire an undercover officer from out of town to go into the game room to ensure anonymity. The investigation would take time and the officer would have to spend potentially thousands of dollars in order to ever collect any money from the careful game room employees or owners. Then, it is not enough for the officer to say there are illegal activities afoot in the establishment. Orange County District Attorney John Kimbrough’s office has told Shows a police officer must be videotaped in the act of collecting winnings from the game room in order to prosecute.

Shows said he has suspicions as to where a lot of the game rooms are around Vidor. But he said the doors are kept locked and without probable cause, he cannot forcibly enter the premises.

“There’s one at 420 S. Main, the spook house next to the fire station on Highway 12; they’ve got eight-liners in the truck stop in Rose City and 2750 Highway 12,” he said. “It’s rampant. They won’t let me in the door.”

Shows said one illegal gambling facility he knows about has an estimated 36 machines and takes in somewhere between $30,000 and $50,000 per month. He thinks one way to combat the game rooms and their proprietors is to hit them where it hurts — in the pocketbook. He said he is planning on proposing to the Vidor City Council a tax of $250 per month per machine on the “amusement machines,” as the eight-liners are officially called by distributors, in order to deter illegal gambling and to help the city economy.

“I know illegal gambling is going on in this city, and I am taking steps to make sure the city does well from it,” Shows said.

When asked if he would rather shut down the illegal gambling operations or have the city profit from them, Shows replied, “My ultimate goal is to get them to leave.”

Winners and losers

Even if the game rooms are taxed per machine, Shows said he is not confident the measure will stop entrepreneurs from operating game rooms. If the owners are busted in an illegal